Last year I payed 110% of previous year estimated taxes (safe harbor). TurboTax program says I need to pay an underpayment penalty - why?

[guywong]

Did you input your 2024 tax liability into TurboTax?  It's under Other Tax Situations --> Additional Tax Payments.

If you did have your 2024 tax liability entered, when did you pay the 2025 estimated taxes?  Estimated taxes generally need to be paid in 4 equal payments, by 4/15, 6/15, 9/15 and 1/15/2026.

[MarilynG1]

The IRS requires you to pay your tax as you earn it. If you paid the 110% mostly at the end of the year, the IRS deemed your earlier quarters "underpaid". If you paid the 110% in four equal, timely installments and still have a penalty, ensure that "110%" was calculated based on your total tax liability from the previous year, not just the amount you owed at filing.  

Review Form 2210 to see how your penalty was calculated by quarter. 

Here's more detailed info on Form 2210.

@triolo2 

[triolo2]

I paid my estimated taxes on or before each quarterly due date. The 110% amount for 2025 was calculated by a professional accountant/CPA. 

[Vanessa A]

If you paid 110% of your 2024 taxes, then you can go to the underpayment penalty section and answer the questions to have the penalty removed.  

To do this select the following:

1. Federal
2. Other Tax Situations
3. Underpayment Penalties under Additional Tax Payments
4. continue through until you enter your tax liability for last year.  
5. Then if you paid in 2025 110% of your 2024 liability TurboTax will calculate that based on what you entered in the program earlier through W-2's or other payments, and you will then be told you do not have an underpayment penalty.